We will never run out of oil

In 1865, Englishman William Stanley Jevons, one of the greatest social scientists of his day, wrote an exhaustive study titled “The Coal Question: An Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of our Coal Mines.” Jevons’ argument was that England was about to exhaust all available coal resources, which inevitably would mean the collapse of the industrial enterprise upon which Great Britain’s mighty empire depended. He wrote:

It will appear that there is no reasonable prospect of any relief from a future want of the main agent of industry (namely, coal).

And:

We cannot long continue our present rate of progress. The first check for our growing prosperity, however, must render our population excessive.

In contemplating his form of the Malthusian nightmare, W. Stanley Jevons was the M. King Hubbard “Peak-Oil Production” theorist of his day. Like the “Peak-Oil Production” theorists of today, Jevons’ work is filled with detailed analyses of coal mines showing – mine by mine – the estimated amount of coal, the annual consumption of that coal (depletion ratio), and the duration of the supply, anticipating with uncanny precision the “bell-shaped curve” typical of M. King Hubbert’s “peak-oil” graphs.

In his classic 1996 book, “The Ultimate Resource 2,” debunking many different “doom-and-gloom” resource scares that abound in popular and scientific thinking, University of Maryland’s professor of business administration Julian L. Simons, explained why Jevons was flat wrong:

What happened? Because of the perceived future need for coal and because of the potential profit in meeting that need, prospectors searched out new deposits of coal, inventors discovered better ways to get coal out of the earth, and transportation engineers developed cheaper ways to move the coal.

Insightfully, Julian Simons documented a series of authoritative predictions dating back to 1885, all warning that the United States would soon run out of oil.

1885, U.S. Geological Survey: “Little or no chance for oil in California.”

1991, U.S. Geological Survey: Same prophecy by USGS for Kansas and Texas as in 1895 for California.

1914, U.S. Bureau of Mines: Total future production limit of 5.7 billion barrels of oil, at most a 10-year supply remaining.

1939, Department of the Interior: Oil reserves in the United States to be exhausted in 13 years.

1951, Department of the Interior, Oil and Gas Division: Oil reserves in the United States to be exhausted in 13 years.

When did Julian Simons think we would run out of oil? “Never!” was his answer. With 1.28 trillion barrels of oil in proven reserves today – more than ever in recorded human history, despite oil consumption in the world nearly doubling in the last three decades – we should seriously consider that Julian Simons might well be right.

“Peak-Oil Production” believers regard Shell Oil geologist M. King Hubbert as their theoretical deity. In 1956, Hubbert drew a bell-shaped curve that he said showed U.S. oil production would peak in the 1970s and decline from there until U.S. oil would in 2050 be nearly depleted. Subsequently, Hubbert’s adherents have expanded his analysis into a worldwide prediction that we are running out of oil. Again, “Hubbert’s Peak” theorists have serious critics, including prominent oil and gas analyst Michael C. Lynch. In a paper titled, “The New Pessimism about Petroleum Resources: Debunking the Hubbert Model (and Hubbert Modelers),” Lynch argues that Hubbart’s initial analysis was anything but rigorous or scientifically formal:

The initial theory behind what is now known as the Hubbert curve was very simplistic. Hubbert was simply trying to estimate approximate resource levels, and for the lower-48 U.S. he though a bell-curve would be the most appropriate form. It was only later that the Hubbert curve came to be seen as explanatory in and of itself, that is, geology requires that production should follow such a curve.

Indeed, for many years, Hubbert himself published no equations for deriving the curve, and it appears that he only used a rough estimation initially. In his 1956 paper, in fact, he noted that production often did not follow a bell curve. In later years, however, he seems to have accepted the curve as explanatory.

Supporters like to argue that U.S. production “peaked” in 1970. To counter this claim, critics argue that U.S. production has only declined since 1970 because environmentalists and the political Left have aggressively blocked oil production in Alaska and offshore, where oil exploration has generated new finds.

In the first paragraph of his 2005 book, “Beyond Oil: The View from Hubbert’s Peak,” Kenneth Deffeyes, professor emeritus at Princeton, boldly predicts that world production of crude oil will peak in just a few days, on Thanksgiving Day 2005. What happens when crude oil production statistics show increases well into 2006? Will Kenneth Deffeyes eat crow for Thanksgiving Day 2006 if he is wrong? Probably not.

Most likely Deffeyes will simply readjust his theory and pick a new day for “peak-oil production,” either that or he will assert he only meant the prediction metaphorically, not empirically. At any rate, Craig Smith and I are inclined to agree with Julian Simon. When will we run out of oil? “Never!” we too argue. The world has never had proven oil reserves as large as we have today and the trend shows no sign of reversing.